Five Years After Adoption, Where Are We With The CSD Regulation?

the CSD Regulation (Regulation EU 909/2014 on settlement and CSDs) and the roll out of the T2S platform. It is now time to take stock on the implementation, draw the first lessons and see what needs to be improved further. Have CSDs

and their participants implemented CSDR in full?

With regard to the CSDR, from the CSD participants perspective, we understand that they are focused on the settlement internalisers’ reporting. During the Network Forum panel, CSD participants will explain the main challenges in their work on that topic.

From the CSD side, although thirteen European CSDs are already authorised under the new panEuropean law, significant pieces of work are still to be done in order to implement the regulation in full, in particular in the area of settlement discipline, CSD links and passporting. It is also in these areas that some clarifications by the European regulators are still pending. So, CSDs are waiting for the clarification to be able to fully roll out their service.

Despite numerous areas of work still to be done, we can already say that the CSDR has had a positive effect, and it is indeed, first and foremost, the highest level of security for European CSDs. CSDR has resulted in creating a new global standard for regulation of settlement and Central Securities Depository services. In the area of links, ECSDA has helped the CSDs to set up a single link assessment questionnaire that will result in a harmonised approach towards CSD links by all CSDs who are subject to CSDR. The ECSDA CSDR questionnaire is also meant to be responded to by third country CSDs having links with CSDs in the European Economic Area. Therefore, through their links, European CSDs will be raising the level of safety for the market infrastructure globally. ECSDA, including 40 CSDs in 35 jurisdictions, is supporting European CSDs in the process of gathering the link assessments.

CSDs are also working to define how the future penalties framework will look and we are advancing based on assumptions we have taken that remain, in some cases, unconfirmed by the regulator. The delay of T2S mechanism for calculation and settlement of cross-CSD penalties is now confirmed for November 2020 and we expect acknowledgement by European authorities of this delay.

Should the CSDR be reviewed this year?

The review of the CSDR is formally planned to take place in September 2019. Some may say that it is too early for that exercise, as the Regulation is not yet fully implemented and we cannot predict the outcome of the regulatory changes in a way that would allow us to define the areas for an eventual future policy intervention.

During the panel at the Network forum in Athens, we will also consider how imperfections in the first version of the CSDR could be corrected and the new themes that may need to be introduced in order to get the setup of the European infrastructure backbone right.